CEF Discount Calculator
Closed End Fund Discount Factor Analysis
Based on research from CaptiveCapital.org
This calculator helps you estimate the appropriate discount or premium for a Closed End Fund (CEF) based on quantifiable factors. Use the Investment Horizon and factor sliders below to calculate what discount (or premium) would compensate for the specific characteristics of any LIC or LIT you're analyzing.
Investment Horizon
2 years
Expected holding period for NPV calculations. Longer horizons amplify the impact of performance differences and fees.
Performance After Expenses
0.0% p.a.
Annual performance vs. passive alternatives. Underperformance requires buying at discount to compensate.
Total Expense Ratio
0.3% p.a.
True annual costs including all fees, expenses, and indirect costs. Industry average passive ETF: 0.3%.
Exit Liquidity
0%
Poor exit liquidity during selloffs requires proportionate discount. Impacts ability to de-risk or reallocate.
Post-tax vs Pre-tax NTA
0.0%
Gap between post-tax and pre-tax NTA. Below = unrealised gains (trapped tax). Above = deferred tax assets from losses (red flag).
Blocking Stake
0%
Insiders with 25%+ voting shares can block shareholder-favorable resolutions (wind-ups, conversions).
Shareholder Satisfaction
0.0%
Governance quality and investor sentiment. Positive = strong governance reducing concerns. Negative = dissatisfaction increasing discount.
Board / Responsible Entity Representation
0.0%
Board independence and alignment with shareholders. Positive = strong representation reducing concerns. Negative = poor governance.
Tax Leakage
0%
LICs suffer tax inefficiency. Franking credits not efficiently returned as managers benefit from larger asset base.
Capital Raising Dilution
0%
CEFs can raise 15% annually without approval, often at significant NTA discounts, diluting existing shareholders.
Unlisted Assets
0%
Higher proportion of unlisted assets commands higher discount due to valuation uncertainty and liquidity concerns.
Estimated Discount / Premium
0%
Enter factor values to calculate estimated discount
Factor Breakdown